Not upheld: Mortgage administration / arrears handling complaint against Lenvi Servicing Limited

Decision detail

Summary

Ms W complained that Lenvi Servicing Limited refused to consent to her letting a property purchased in 2008 under a Government-funded first-time buyer scheme, claiming the refusal was misleading and the decision took too long. Ms W stated the property was unfit for her and her child due to damp and other issues, and she could not afford to pay both mortgage and rent. The ombudsman found that the loan agreement and scheme rules prohibited letting without consent from Homes England, and that Ms W's circumstances (having let the property since 2017 with no intention to return) did not constitute exceptional short-term circumstances warranting consent. While acknowledging delays in Lenvi's response, the ombudsman upheld the £500 compensation already paid and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that the loan agreement clearly prohibited letting without written consent from Homes England and required the property to be used as the borrower's principal residence. The FTBI scheme rules do not permit letting. Although there was uncertainty about which scheme applied, the ombudsman concluded that either the loan was part of a scheme prohibiting letting, or it was part of a scheme allowing letting only in limited circumstances for exceptional short-term situations. Ms W's situation did not meet these criteria as she had been letting the property since 2017 and had no intention of returning to it. The ombudsman found it fair that Lenvi declined consent, though acknowledged delays in the decision-making process warranted the £500 compensation already paid. The ombudsman rejected claims of bullying and harassment, and found Lenvi not responsible for the property's condition.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website